General Mills expressed optimism for its fiscal 2027, aiming to regain market share among price-sensitive consumers by reducing costs and expanding its product portfolio. The company reported mixed financial results for the quarter ending in May but anticipates improved performance in the year ahead.
Shares of the maker of Cheerios and Annie’s Mac and Cheese surged more than 8% following the release of its fiscal fourth-quarter earnings. While the stock had declined approximately 25% over the past year, executives signaled confidence in the company’s strategic direction. Chief Executive Jeff Harmening highlighted gains in household penetration and a stronger operational foundation as reasons for optimism.
In response to ongoing consumer budget constraints, General Mills has absorbed increased costs to lower product prices. With those adjustments largely in place, the company plans to prioritize new product launches and marketing efforts focused on health-conscious ingredients and bold flavors. Emphasis will be placed on products rich in protein and fiber. Additionally, General Mills is investing in its pet food segment, which saw North American sales growth during the quarter, even as the traditional retail segment experienced a decline.
To improve efficiency and counter inflationary pressures, the company is targeting $3 billion in cost savings by fiscal 2030.
General Mills reported a net loss of $2.01 billion, or $3.74 per share, in the quarter compared with a profit of $294 million, or 53 cents per share, a year earlier. The substantial swing to a loss was primarily driven by $1.8 billion in noncash charges related to higher discount rates and an additional $1 billion noncash valuation loss tied to the planned sale of its Brazil business.
Excluding these one-time items, adjusted earnings per share were 95 cents, surpassing the FactSet consensus estimate of 80 cents. Revenue increased 1% to $4.61 billion, slightly exceeding analyst expectations of $4.59 billion.
Chief Operating Officer Dana McNabb cautioned that consumers remain under financial pressure, a trend likely to persist into the new fiscal year. She noted that shoppers are expected to increasingly rely on promotional deals, opt for smaller package sizes, and limit spending on everyday-priced items.
The company also reported a 1 percentage point deceleration in certain product categories as the fiscal year ended, forecasting that overall category growth will remain below long-term historical rates amid the challenging economic environment.
Looking ahead, General Mills projects annual adjusted earnings per share between $3 and $3.20, close to analysts’ consensus estimate of $3.13 per share.